The Economic Case for Climate Action in the United States

Other weather events that can be influenced by human-induced climate change have impacts on health. Heat waves –more than two consecutive days of extreme heat —have become more intense20. Extreme heat impacts human health, including heat strokes, heat exhaustion, heat cramps and heat rashes21. Heat waves are linked to an increase in emergency room visits, hospitalizations, and premature mortality. In July 2006, California had a 14-day heat wave. About 36 million people were affected, leading to more than 16,000 emergency room visits, 152,000 outpatient visits and 1,620 hospitalizations. These aggregate health costs were estimated at $207 million 22. In addition, this 2-week heat wave caused 655 premature deaths, estimated at $6 billion23 in health costs24. The number of deaths as a result of this heat wave exceeded the current annual average of 618 deaths by extreme heat in the United States25.

The 2006 heat wave also impacted other states, when half of the United States experienced maximum temperatures much above normal. This percentage was exceeded in 2012 and in 2016 with 88 percent and 70 percent, respectively. These are the three years with the highest percentage of the United States experiencing maximum temperatures above normal since 191026. Heat waves are increasing27, which will aggravate health impacts and further escalate health costs.

The increase in the number of weather events influenced by human-induced climate change is the result of the already observed 1.1ºC increase in global temperature above pre-industrial times28.

Despite the escalating economic losses and costs on lives, health, homes, businesses and livelihoods, the United States continues to primarily rely on fossil fuels to produce energy, the root cause of climate change.

Coal, oil and natural gas –all fossil fuels— account for about 80 percent of the primary energy produced and used in the United States29. This percentage has decreased slightly during the last two decades, but still remains above 80 percent. As a result, 82 percent of the United States greenhouse gas emissions are currently from carbon dioxide (CO2) from fossil fuel burning30. CO2 emissions are primarily driving the observed changes in the climate.

Burning fossil fuels to generate energy (electricity, fuel and natural gas) comes at the price of the impacts of climate change. It also brings about air pollution which, in turn, has consequences on health.

More than 43 million people in the United States live in areas with unhealthy air pollution31. The costs of health damages due to air pollution exposure caused by energy production in the United States were estimated at $188 billion32 in 2011. However, effective emission regulations on the energy sector have successfully reduced air pollution and thus decreased health costs from $255 billion33 in 2002 –a 35 percent reduction. Indiana, Ohio and Pennsylvania are the states with the highest annual damages from electric power generation, oil and gas extraction, coal mining and oil refineries34. The Appalachian region also has a significant public health burden. Alabama, Kentucky, Maryland, Ohio, Pennsylvania, Tennessee, Virginia and West Virginia produce 25 percent of the coal in the United States35. The health costs associated with coal mining of communities in Appalachia was estimated at $86 billion a year3637.

These three trends –more frequent and intense weather events influenced by human-induced climate change, increased economic losses and health costs, coupled with continued use of fossil fuels– will continue to negatively impact Americans and the American economy.

Impacts on the United States economy growth

The United States economy has been adding $610 billion a year on average in the last decade, except for 2009 –a recession year38.

The impacts of weather events influenced by human-induced climate change and direct human health consequences of pollution from fossil fuel use are currently causing, on average, $240 billion a year in economic losses, damages and health costs –or about 40 percent of the current growth of the United States economy (Table 1). This amount equals 1.2 percent of the GDP. This is a conservative estimate because the sum does not include economic losses due to additional consequences of extreme weather events, such as decreased agricultural yields or health costs for premature deaths due to heat waves. This total is more than three times the amount spent for the Department of Education ($67 billion) or five times the amount for the Department of Homeland Security ($48 billion) for this year39.

These massive costs are being borne mainly by individuals, not the Government or the private sector.

These economic losses and health costs are projected to continue to escalate due to the increasing number of weather events influenced by human-induced climate change and fossil fuel use.

Based on the rising trend in the last decade, and considering the current path, economic losses from weather events influenced by human-induced climate change could at least double in the next decade. Health costs caused by fossil fuel use could increase by at least 33 percent due to the current revocation of regulations, rules and policies to energy production40.

Thus, economic losses from weather events influenced by human-induced climate change and health costs caused by fossil fuel use could escalate to at least $360 billion a year or 50 percent of the economic growth in the next 10 years.

Some argue that rebuilding efforts after an extreme weather event boost economic growth. However, by continuing to rely on fossil fuels to generate energy and grow the economy, job creation in the United States will otherwise be focused on rebuilding and reconstructing what the increasing number of weather events will continue to damage and destroy.

Sources:

20. Explaining Extreme Events of 2015 from a Climate Perspective, in the Bulletin of the American Meteorological Society (2015) ↩21. Centers for Disease Control and Prevention (CDC), Warning Signs and Symptoms of Heat-Related Illness: https://www.cdc.gov/disasters/extremeheat/warning.html ↩22. CPI-adjusted from $179 million in 2008 dollars ↩23. CPI-adjusted from $5.1 billion in 2008 dollars ↩24. Six Climate Change-Related Events In The United States Accounted For About $14 Billion In Lost Lives And Health Costs: Knowlton, et al. (2011) ↩25. Centers for Disease Control and Prevention (CDC), Natural Disasters and Severe Weather – Extreme Heat: https://www.cdc.gov/disasters/extremeheat/index.html ↩26. NOAA, National Centers for Environmental Information: https://www.ncdc.noaa.gov/extremes/cei/graph/us/1c/01-12 ↩27. Bulletin of the American Meteorological Society: Monitoring and Understanding Changes in Heat Waves, Cold Waves, Floods and Droughts in the United States: State of Knowledge (2013) ↩28. World Meteorological Organization, State of the Global Climate (2016) ↩29. U.S. Energy Information Administration, Primary Energy Overview (2016) ↩30. Second Biennial Report of the United States of America under the United Nations Framework Convention on Climate Change, 2016 ↩31. State of the Air 2017, American Lung Association: http://www.lung.org/our-initiatives/healthy-air/sota/key-findings/people-at-risk.html ↩32. CPI-adjusted from $131 billion in 2000 dollars ↩33. CPI-adjusted from $175 billion in 2000 dollars ↩34. Energy Policy: The International Journal of the Political, Economic, Planning, Environmental and Social Aspects of Energy, Vol. 90 (2016) Air pollution emissions and damages from energy production in the U.S.: 2002–2011, Paulina Jaramillo (Department of Engineering and Public Policy, Carnegie Mellon University) and Nicholas Z. Muller (Department of Economics, Middlebury College) ↩35. U.S. Energy Information Agency ↩36. CPI-adjusted from $74 billion in 2008 dollars ↩37. Annals of the New York Academy of Sciences: Full cost accounting for the life cycle of coal, Paul R. Epstein et al (2011) ↩38. U.S. Department of Commerce, Bureau of Economic Analysis ↩39. U.S Congress, Appropriations for Fiscal Year 2017 ↩40. Executive Order on Promoting Energy Independence and Economic Growth, March, 2017 ( https://www.whitehouse.gov/the-press-office/2017/03/28/presidential-executive-order-promoting-energy-independence-and-economi-1) ↩